''As I understand it, there was a buyer but the buyer was not prepared to invest in the magazine in sufficient time to meet the pressures that we're under,'' said Tony Hendra, the editor in chief.

Pigozzi had no comment. The 78th and final issue of Spy goes on sale March 1 in New York and March 8 nationally.

The closing of Spy comes despite more than 20 percent increases in advertising revenues and circulation in the past year, said advertising director Elaine Alimonti. She said circulation was at 200,000, an all-time high.

Spy was founded in 1986 by Graydon Carter and Kurt Andersen. Carter went on to positions as publisher of the New York Observer, a weekly newspaper, and Vanity Fair magazine. Pigozzi and his co-investors bought the magazine in 1991.

Spy prided itself on exposing the foibles of the rich and powerful.

In January 1993, its staffers called 20 freshmen congressmen and asked what the United States should do to stop ethnic cleansing in Fredonia, the name of a fictitious country in the Marx Brothers movie ''Duck Soup.''

Several fell for the ruse, giving answers ranging from ''Take action,'' to ''It's a different situation than the Middle East.''

In 1992, Publisher Gerald Taylor called ousted White House Chief of Staff John Sununu and pretended to be a corporate headhunter feeling him out about future jobs. When asked what kind of money he was looking for, Sununu gave $3.5 million as a ballpark figure.

Spy also published parodies of Vanity Fair and The New Yorker magazines, with a fake nude photo of Editor Tina Brown gracing the latter.